Landowners told to be careful before signing gas lease

March 20, 2013

STEUBENVILLE - An energy specialist with the Ohio Farm Bureau told landowners Tuesday to do their homework before they ink a deal with a pipeline company.

Dale Arnold, director of energy services with the Ohio Farm Bureau, told a crowd of about 75 people attending the forum, sponsored by the GO Jefferson County committee, that the rules change depending on whether a particular pipeline is considered interstate or intrastate, or if it's merely a collection line. GO Jefferson County is the new name of the former Jefferson County Oil and Gas Committee formed in 2012 by the Jefferson County commissioners.

Arnold said the governing body for each type of pipeline is different - interstate pipelines fall under the Federal Energy Regulatory Commission, while intrastate lines are overseen by the Public Utilities Commission and Ohio Power Siting Board, and collection lines are in the Ohio Department of Natural Resources bailiwick. So are the rules.

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LEASING DISCUSSED — The Ohio Farm Bureau’s Dale Arnold discussed pipeline land leasing and installation issues with about 75 area residents attending an oil and gas forum Tuesday at Eastern Gateway Community College. The forum was sponsored by the GO Jefferson County committee. -Linda Harris

For instance, he said landowners impacted by an interstate pipeline will be notified by registered mail.

Arnold said landowners invariably want to know if they have to allow the pipeline developer with access to their property. "The answer, under both federal and state law, is yes," he said, noting the first step is "always to look at the property, draw lines on a map and do an environmental survey."

"But remember," he added, "They have the right to access your property to do the initial survey, but you have the ability to schedule a time and you have the right to be there or to have a representative of your family there."

That's important, because it gives landowners a chance to point out specific areas that concern them - maybe the route they're looking at would go through a high erosion area or an area of historical significance.

"Discuss your unique needs and requirements of your property" with them, he said. "That's when you start the dialogue."

He said Eminent Domain guarantees the pipeline companies access to a property, "but that's all it gives. Everything else is highly negotiable."

Details like the depth of the pipeline, how soil will be treated, site remediation and compensation should all be part of the agreement.

He also advised easements should be created for each individual piece of property, should stipulate that each agreement covers just one particular project and, in the event the pipeline is ever abandoned, all rights revert to the original landowner. Also important, he said, is how you want to use the land going forward.

He said landowners should demand a detailed map showing what the pipeline company is going to do and where before they sign, and said good legal advice is critical.

"Negotiation is key," he said. "Your business partner is going to give you a 'first offer.' Do you always take the first offer? No."

He said landowners should take into consideration how much of a particular property will be taken out of production, potential uses for that ground going forward, the going rate, how the pipeline will impact property value and, for farmers, how much it will cost them to rent property to maintain production until they can use their own land again. That information forms the basis for informed negotiations with any pipeline company, he said.

"Anything is negotiable," he said. "And if you decide not to lease ... make sure you understand the legal implications."

Mike McGlumphy, director of Jefferson County Connections, a one-stop employment and training center in Steubenville, also discussed job opportunities in the oil and gas industry as well as education and training requirements.